Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

House-building lifts construction sector

Philip Thornton,Economics Correspondent
Friday 03 October 2003 00:00 BST
Comments

The construction industry, the UK economy's fastest growing sector, enjoyed its strongest month for more than two years in September, according to a survey published yesterday. The acceleration was driven by expansion in house-building, further highlighting the economy's dependency on Britons' love affair with their homes.

However the survey also pointed to an increase in activity in the commercial sector, also running at a two-year high, which could point to a wider business recovery.

The Chartered Institution of Purchasing and Supply, which polls managers in 130 companies, said construction had now grown for the past 56 consecutive quarters - almost five years. The higher levels of activity were attributed to further robust new business growth and work starting on previously secured contracts.

Roy Ayliffe, a director at CIPS, said: "This was driven mainly by robust growth in new business from the housing sector and, more significantly to the economy, the commercial sector." Although construction only makes up a 20th of the economy according to the Office for National Statistics, it is currently growing by more than 6 per cent a year. A big upward revision to construction output in the second quarter was almost solely responsible for doubling the ONS's estimate of overall economic growth earlier this week to 0.6 per cent.

Meanwhile corporate profitability rose to its highest level in almost three years over the summer, according to government figures. Businesses' rates of return on capital rose to 11.9 per cent in the three months to June from 11.8 per cent in the previous quarter.

The main factor was a surge in profitability among manufacturing firms, which hit a four-year high. An ONS spokesperson said: "This may reflect restructuring which has taken place, an increase in new orders as well as a recovery in profits by companies."

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in